Australian shares rise on financials, materials underperform; NZ down

3 Min Read

* Aussie shares climb on financials

* Investors cheer soft inflation

* Slide in aluminium prices drags materials

* NZ led down by consumer staples

By Aditya Soni

April 24 (Reuters) - Australian shares ticked up on Tuesday, led by banks as benign inflation data backed expectations interest rates will remain accommodative for some time yet, though the upside was capped by losses in materials on an extended slide in aluminium prices.

Data earlier showed Australian consumer prices stayed soft last quarter as core inflation began a third year below the central bank’s target, cementing expectations any hike in interest rates is a long distance off.

“The overall rate is still soft, there is no danger from interest rate for investors so there has been a positive market reaction,” said Michael McCarthy, chief market strategist at CMC Markets.

Banks accounted for most of the gains on the financials-heavy benchmark for a second day in a row, with top lender Commonwealth Bank of Australia rising 1.4 percent, while Westpac Banking Corp climbed 1.1 percent to a near two-week high.

Some of the focus from a Royal Commission inquiry into the financial sector has shifted away from the banks to a particular fund manager, McCarthy said.

Australia’s largest wealth manager AMP Ltd has been under the cosh since its executives admitted last week that the company had lied to the corporate watchdog for almost a decade to cover up a practice of charging customers for services it did not provide.

Since the revelations, AMP’s shares have been hammered with about $1.60 billion shaved off its market capitalisation while it also announced the departure of its CEO Craig Meller. Shares of the Sydney-based company were trading 2.2 percent lower.

Losses were especially widespread in the materials sector, driven down by a slump in aluminium prices.

Aluminium suffered its biggest one-day drop in eight years on Monday, after United States extended the deadline for companies to wind down business with sanctions-hit Russian producer Rusal.